The Reserve Bank of India on Monday relaxed norms for infrastructure companies with direct foreign equity up to 25 per cent to raise fund overseas without government permission.
On a review, it has been decided to further liberalise the External Commercial Borrowings (ECBs) policy in respect of the infrastructure sector, RBI said in a statement.
Direct foreign equity holder (holding minimum 25 per cent of the paid-up capital) and indirect foreign equity holder holding at least 51 per cent of the paid-up capital, will be permitted to provide credit enhancement for the domestic debt raised by Indian companies engaged exclusively in the development of infrastructure through the issue of capital market instruments, it said. It includes infrastructure finance companies (IFCs) and no prior approval will be required from the Reserve Bank for providing such credit enhancements, it said.
The company fulfilling foreign equity criteria does not require permission for raising ECB up to $5 million.
ECB from a group company may also be permitted provided both the borrower and the foreign lender are subsidiaries of the same parent, it added. — PTI